• Keep BUY and MYR1.33 TP, 31% upside. We reiterate our positive stance on Samaiden Group’s outlook, after the group secured its first contract win under the Corporate Green Power Programme (CGPP), reflecting its strong position in the solar space. Given its proven track record, the group is likely to continue seeing robust contract wins as more renewable energy (RE) initiatives are introduced.

• First CGPP EPCC contract win. Samaiden has secured its first CGPP EPCC contract valued at MYR52m. The contract is for a 14MWac large-scale solar (LSS) plant located in Sungai Petani, Kedah, and was awarded by Legasi Green Power (LGP), which was incorporated in Dec 2023. LGP's shareholders include Angelaxy Power (30%), Asanaga (30%), and Greenviro Solutions (40%). Angelaxy Power is wholly owned by Datuk Ir Chow Pui Hee, Managing Director and major shareholder of Samaiden, while Asanaga is owned by Fong Yeng Foon, Executive Director and also major shareholder of Samaiden. Consequently, this transaction qualifies as a recurrent related party transaction (RRPT) of a revenue or trading nature, for which Samaiden will seek shareholder approval at its fifth Annual General Meeting (AGM).

• Outlook. With this contract, Samaiden’s orderbook is estimated to rise to MYR365.5m, marking a 16% increase from the MYR313.5m reported in 4QFY24 (Jun). Samaiden previously indicated its intention to secure at least 100MW of EPCC jobs under the CGPP initiative, in addition to its 43.3MW of gross assets under the programme. For this contract, we forecast a GPM of 10-15%, in line with typical utility-scale EPCC projects. Groundwork is expected to begin by the end of 4QCY24, pending necessary approvals, with the Scheduled Commercial Operation Date (SCOD) targeted for 30 Aug 2025.

• Maintain BUY. We maintain our earnings estimates, as this contract is within our orderbook replenishment assumptions. Our SOP-derived TP is kept at MYR1.33, which is based on a valuation of: i) 24x FY25F P/E on EPCC earnings, (ii) DCF (WACC of 7.8% for its 60%-owned biogas asset), and iii) DCF (WACC of 7.8% for its biomass asset). We have yet to incorporate Samaiden's CGPP assets, pending the finalisation of its stake in these projects. Our TP includes a 6% ESG premium, reflecting Samaiden’s ESG score of 3.3, which is above the country median of 3.0.

• Risks. Downside risks include discontinuation of solar incentives, competition risks, and higher-than-expected project costs.

Source: RHB Research - 1 Oct 2024